Downsizers are expected to occupy around one in five of the homes in Australia’s newest and largest rental-only apartment towers, in a sign that leasing is playing a growing role in the nation’s over 50s housing options.
During August, developer Mirvac launched its newly-built LIV Indigo towers at Sydney Olympic Park in Sydney’s west. It is also seeking to develop a further 1,460 apartments across three projects in Melbourne (these will come online from late 2022).
The Sydney Olympic Park project includes 315 one, two and three-bedroom apartments, in two towers which are joined by a skybridge. The towers have been purpose-built for renters, and include a gym, a cinema and co-working and event spaces.
Mirvac is billing the project as the “first residential community in NSW designed and built exclusively for renters". It’s also understood to be the largest of its type in Australia.
Unlike in a traditional apartment building, Mirvac will retain ownership of all the apartments, meaning there is no reason for any of the tenants to be evicted as long as they keep paying their rent and behave.
Tenancy agreements will be for 12 months, with no bond and annual rent increases capped at four per cent. Pricing is targeted towards the aspirational and professional end of the market, with one bedroom apartments starting at $535 per week, two bedroom apartments starting at $615 per week and three bedroom apartments starting at $900 per week.
All white good appliances are supplied, while tenants are also allowed to add personal touches to their apartments, such as painting walls or hanging pictures.
Mirvac’s Build-to-Rent National Operations Director Andrew Hansen told Downsizing.com.au that, based on experience from similar projects in the United States and United Kingdom, and pre-leasing inquiries, he expected around 20 per cent of tenants would be downsizers.
He said the rental-only property model provided downsizers with a range of potential advantages, including allowing them to keep the family home but to move a more lifestyle-rich location, and also to have secure housing in later life. The ability for downsizers to avoid home maintenance was also a strong motivator, Mr Hansen said.
“There has been strong demand in the UK from downsizers for the build-to-rent model. It means that downsizers feel like they are living in a home, not just in someone else’s investment property,” Mr Hansen said.
At the launch, NSW Planning Minister Rob Stokes spoke with enthusiasm about ‘build-to-rent’ housing, saying the NSW Government had put in place land tax incentives and was proposing planning regulation changes to support the model.
“This (project) redefines what home ownership means,” Mr Stokes said.
“To have a home, a home is not just a piece of paper with a title with a second schedule with your name and mortgage. Build-to-rent is about housing justice.”
Mr Stokes signalled that the government would be continuing to work on new housing tenure models, including longer-term leasehold housing and shared equity models.
“So much of the debate in planning policy in this State and country has been about building typologies, whether we go high or sprawl, we’ve focussed on housing types, and been immature in our discussion about the other part of the question which is housing tenures,” he said.
Rental playing an increasing role for downsizers
Renting is an emerging and growing downsizing trend in Australia - and with good reason.
More Australians are entering retirement without the benefit of property ownership. This means they are looking for secure, longer-term rental options in retirement.
This could be more upmarket options such as the Mirvac towers, or less expensive and more traditional options such as seniors’ rental villages or land lease communities.
In addition, there are huge tax advantages when it comes to renting. You don’t need to pay stamp duty, nor body corporate fees or council rates, and if you claim the aged pension it is also possible to benefit from Commonwealth rental assistance.
With this in mind, it’s no surprise that over 50s property companies with a strong focus on renting, including land lease community and seniors rental village operators, have had a relatively strong profiting reporting season with the Australian Securities Exchange.
- FIND AUSTRALIA'S WIDEST RANGE OF LAND LEASE COMMUNITIES HERE
- FIND AUSTRALIA'S WIDEST RANGE OF DOWNSIZING FRIENDLY HOMES TO RENT HERE
Newcastle downsizers moving in
Michele and Donald Stokes will be one of the first tenants moving into the building.
Michele and Donald, both aged in their 60s, downsized ten years ago from their former Sydney family home to an apartment in Newcastle.
However, the arrival of a grand-child and a desire to be closer to their two adult sons - and Sydney’s vibrant arts and cultural scene - has led them to rent a roomy one-bedroom apartment in the LIV Indigo complex.
They will retain their Newcastle apartment, while living part-time in Sydney, in what they are saying is something of an experiment.
The couple said they wouldn’t have ordinarily considered renting, because of the possibility they could be evicted on a landlord’s whim. However, they said the Mirvac model meant they had guaranteed tenure, while at the same time being in an attractive location and also with an apartment which was partly furnished.
They are also looking forward to mixing with their new neighbours.
“The concept of a community of people across a whole range of age demographics, is of interest to us,” Mr Stokes said. ”We enjoy mixing with young and old, and see this project is an opportunity to do that.”